It will help if you also read the Squeezebox threads here and at Slimdevices' website. Simplifying a lot, you have a choice between: 1) an external USB device like the Empirical Off Ramp with a software player like Foobar, or 2) an integrated network player like the Slimdevices Squeezebox or Transporter, which you can use either wired or wireless. Both routes circumvent any Windows sound issues completely and, as others said, would be as good or better than any reasonably priced CD transport as sound source.
I understand the Monarchy D24 is as good as anything several times its price, but I have not listened to it. With the full analog and digital Bolder mods for the Squeezebox, many of us find we don't need an external DAC.
I would not recommend Linux unless you're willing to go the extra mile on learning about it. I have used it for many years and still encounter some problems.
